Joe Mendonca, Director of Sales at Cleverbridge: Automating revenue for Global SaaS and Digital companies.
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The demands of leadership have never been more challenging; during these uncertain economic times, leaders are asked to do more with less. They need enhanced retention and growth while still maintaining or growing their budgets—and that’s not all! There also needs to be an increased focus on cross-selling opportunities for existing customers as well as new ones you’re trying to attract.
Continuing the conversation from my previous article on digital transformation (DX) and the importance of shifting your organization with digital automation, I believe DX should be front and center of your initiatives—specifically, renewal automation. Here’s why it matters more now than ever before.
SaaS companies are under constant pressure to service their customers and create innovative new products, all while having to constantly increase their revenues—and specifically, their net recurring revenue (NRR)—and minimize overall customer churn.
In order to do this, leaders need to have a clear understanding of their customer journey and what behaviors drive them to renew their subscription, year over year. By automating the renewal process, business leaders can free up more time to focus on other areas of the business that can increase efficiency and the bottom line.
In the world of software as a service (SaaS), DX can take many different forms. It might mean automating renewal processes to reduce customer churn or shifting to a subscription-based pricing model to generate new recurring revenue streams. It could also involve adopting new technologies such as artificial intelligence (AI) or machine learning (ML) to improve the customer experience.
Let’s talk about churn and the specific ways in which automating the renewal process helps reduce churn. When customers are reminded of the value they receive from your product or service, they are more likely to renew their subscription. By automating the renewal process, you can ensure that your customers are regularly reminded of the value they are receiving—reducing the chance they’ll leave you in the long run.
One way to assist companies in their DX is by using a global e-commerce partner. As a disclosure, this is a solution offered by my company Cleverbridge, which provides revenue automation for global SaaS and digital companies.
So, where do we go from here? Here are four ways leaders can continue to drive digital transformation in our uncertain times.
1. Ensure open communication.
The question is straightforward: If you need to retain your customers, why are all your marketing dollars focused on net-new acquisition? Keeping your customers in the loop will increase their satisfaction. When your customers don’t know what’s going on, there will always be some uncertainty—which can lead to a churned customer.
So, keep those communication lines open by consistently reaching out to customers who have bought something from you before. This can help prevent loyal customers from feeling left out when changes are made.
One way you can achieve consistent, tailored communication with your customers is by automating the process with digital marketing services. Don’t worry if you don’t have the expertise in-house: There are third-party partners who can support you here, sometimes at a fraction of the cost it would take you in-house.
Also, ensure new products coming down the pipeline get discussed upfront rather than kept behind the scenes, which might allow issues to remain unsolved until too late in the game. Early feedback can be invaluable in its ability to reveal opportunities for product improvements, such as the consideration of trial offerings or converting new features into paid upsells.
2. Get creative with your pricing models.
What percentage of your customers is subscription-based? Have you transitioned to a full SaaS model? Remember, you don’t have to move all customers and products to a subscription model of selling at once.
Rather than changing your customer experience all at once, consider introducing a subscription model offering select products at a determined rate. Build up multiple revenue streams through both traditional sales and subscription sales. Consider offering additional discounts by introducing new subscription tiers or longer payment terms to customers who may benefit from them.
3. Innovate with the best technologies.
Innovation is a necessary component for driving digital transformation. If you haven’t already done so, now is the time to explore cutting-edge technologies that offer your business automation, including AI and ML.
Consider leveraging partnerships with technology companies that can deliver the results you need at an accelerated pace. The easiest question to ask yourself is: “Can I get to my end goal faster with this partner rather than doing it myself?”
In the end, innovative technology should help you streamline internal processes and improve the customer journey.
4. Focus on employee engagement.
Employee engagement is the key to keeping your employees motivated and productive during these challenging times. Invest in initiatives that will help them feel like they’re a part of something bigger than themselves, all while helping you succeed. When your employees thrive, so do your customers.
How does automation play a part in my company’s digital transformation?
Digital transformation can seem difficult to implement in your business. But out of adversity comes opportunity. The possibility to strengthen your operational excellence through automation allows you to achieve improved resource efficiencies and cost-effectiveness.
The automation of subscription renewals in SaaS is one area that should be given special attention. Most SaaS organizations have a team of renewal managers that need to interact with every customer, no matter the order value, to complete a purchase and or renewal period.
The problem that starts to arise is when renewal managers find themselves mainly focusing their attention on the renewals with the highest order values, ultimately leaving your low-value order customers feeling the pinch.
By automating these customers, you can better deliver a great customer experience. This enables you to both narrate the experience and allow for self-service—preventing churn while allowing your renewal management team to focus on your top clients.
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